Florida Legislative Update: Wayfair

McGuireWoods Consulting
Contact

Online Tax Consideration Expected to Make Headway in 2021

Online taxation will be a hotly contested issue in the 2021 Florida legislative session, potentially reaching into every industry that sells goods and services online in the Sunshine State. How the legislation is written could have a major impact on many businesses selling goods and services online, including those currently remitting state sales tax. 

In the House, three-term Rep. Chuck Clemons (R-Gainesville) has filed House Bill 51, which defines a “retail sale” as including remote sales and sales made through an internet marketplace. The Senate is expected to file a companion bill soon.

In addition to support from Republican Party of Florida Chairman Sen. Joe Gruters, Sen. President Wilton Simpson sent a clear message last month that he wants to pass a version of this bill. As the presiding officer, he will have tremendous sway over the legislative process and could push it through. The state budget may be in need of a boost in revenues, as COVID-19 has hit the Florida budget to the tune of billions of dollars. Many conservatives believe this change in the law is not a tax increase, and that it is the collection of taxes already owed the state. This framing of the issue could result in the passage of the legislation. 

Retailers that conduct remote sales to customers in Florida are wise to take heed, as committees will start hearing bills in early- to mid-January, while session kicks off March 2, 2021.

Background on Online Tax Issue

Online taxation is often referred to as the “Wayfair tax”, getting its name from a Supreme Court case, South Dakota v. Wayfair, Inc. On June 21, 2018, the U.S. Supreme Court ruled 5-4 that online retailers may now be required to collect sales tax in states where they do not maintain a physical presence. The majority’s view was that requiring only brick-and-mortar businesses to collect and remit sales tax put them at a disadvantage against online retailers, some of whom are doing significantly more sales in that state.

Since that decision, the vast majority of states that maintain a sales tax have passed some version of policy to address this issue. As of April 2020, Florida was one of only two states that has not enacted any legislation to require online retailers to collect sales tax. Legislation has been filed in past years, but failed to pass. 

This year appears to be different in Florida. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McGuireWoods Consulting | Attorney Advertising

Written by:

McGuireWoods Consulting
Contact
more
less

McGuireWoods Consulting on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.